SIP Trunking News

[February 25, 2013]

Revealed: The Fragility of UK Mobile Customer Loyalty; WDS study finds nearly 40% of UK mobile subscribers at risk of churn in the next 12 months; only 12% truly loyal

(M2 PressWIRE Via Acquire Media NewsEdge) Mobile World Congress 2013, Barcelona, Spain - The first 'authentic' audit of loyalty among UK mobile subscribers, released today by WDS, A Xerox Company, has worrying implications for mobile operators. The WDS 2013 Mobile Loyalty Audit, integrating new survey data from research specialist TNS, reveals that 38% of UK subscribers are considering leaving their mobile operator in the coming 12 months. The audit also finds that only 12% of customers show the level of loyalty required to protect them from competitive offers and service disruptions.

For the first time, the WDS 2013 Mobile Loyalty Audit uses "stress-tests" to show the impact of real-world disruptions on a customer's propensity to churn and deliver a realistic view of the level of loyalty that exists in the UK. When stress-tested, the audit found customers' positive sentiment towards not switching could be easily reversed, for example:
What if...your current mobile operator increased prices by 10%
67% of customers who were previously unlikely to switch would now consider leaving.

14% of them would switch immediately without further consideration.

57% of highly satisfied customers would also consider switching, 13% would leave without further consideration.

What if...another operator could reduce your monthly tariff by 10%
Only 34% of customers who were previously unlikely to switch could guarantee that they wouldn't leave for this saving.

What if...there was a privacy breach
85% of those that said they were unlikely to switch would now consider leaving.

42% of them would switch immediately without further consideration.

39% of highly satisfied customers would switch immediately.

The study suggests that the number of customers at risk of churn could be underestimated by operators. Additionally, many existing measures of loyalty, such as customer satisfaction and Net Promoter Score (NPS), often deliver overly simplistic and potentially misleading results. For example, the WDS audit found that 17% of customers currently considered a "switch-risk" are actually highly satisfied with their mobile operator. Likewise, 15% were NPS Promoters.

It also showed that one fifth of all customers staying with their current operator this year are doing so not through any sense of loyalty, but because they feel that "all mobile operators are the same" and that there is no benefit in switching.

"We've been measuring loyalty in a vacuum; assigning valuable retention budget based on customer sentiment and an out-of-date notion of what loyalty actually is," says Tim Deluca-Smith, Vice President of Marketing at WDS. "A customer might say that he is satisfied or that he has no intention of switching, but how does that sentiment change when there's a network outage or his monthly tariff increases Loyalty means more than just a customer's intent to repurchase - this is only as good as the next handset subsidy or price discount. True loyalty creates customers that are forgiving when things go wrong and resistant to competitive offers."
The WDS Loyalty Audit also debunks some of the common myths around customer churn. In particular that customers switch primarily because of price, availability of devices or network coverage. Across each of these, the majority of at-risk customers were actually satisfied with their current operator's performance. Just 25% thought they got poor value for money, 21% that network coverage was poor and 13% that availability of devices was inadequate.

Instead, it seems operators are failing to create a feeling of "value" and "reward" among many of their customers. Over 40% of those at risk of switching felt they weren't valued or rewarded. In fact the data shows that if a customer doesn't feel valued they are more than twice as likely to become a switch-risk.

The study concludes with many positive take-aways for mobile operators looking to better manage customer loyalty. In particular the study emphatically shows how some service elements are more influential in building, or damaging, loyalty than others.

While a single interaction with customer support is relatively benign in its loyalty influence, customers that have to contact customer support more than once in a six-month period are twice as likely to be a switch-risk.

Getting any kind of care interaction right is critical. A customer who rates the performance of customer care as "Excellent" is nearly four times more likely to be secured beyond 12 months than someone who rates the experience as "Poor".

Retention budget can be better deployed and many expensive rewards programs are not working. Their value is unproven in creating long-term loyalty and 82% of customers felt they weren't adequately rewarded through existing programs.

"Building trust, developing a sense of value and sustaining strong customer service are fundamental to securing long-term loyalty; especially given the level of parity that exists between operators' pricing strategies and network performance," concludes Deluca-Smith. "Satisfaction alone is no longer enough, in fact it's become little more than a cost of doing business. The WDS Loyalty Audit shows that only 12% of UK customers have the level of loyalty we deem necessary to insulate them from competitive offers and service failures. Understanding who these customers are will help operators to better understand the customers at risk and deploy retention programs that build a more emotional and resilient tie between customer and brand."
To download the full report: http://www.wds.co/enlightened/wds-loyalty-audit-2013/WDS-Loyalty-Audit-UK.pdf
UK Loyalty infographic: http://www.wds.co/enlightened/wds-loyalty-audit-2013/WDS-Loyalty-Audit-UK.jpg
About WDS
WDS, A Xerox Company, is a leading provider of Customer Experience Management (CEM) solutions to the wireless industry.

Our goal is to help wireless brands deliver a more consistent, differentiated and profitable customer experience, shifting attention away from 'managing' customer experience problems and towards mitigating failures that we know have the potential to increase costs and damage end-user loyalty and profitability
We achieve this by embedding a CEM platform across the "customer lifecycle", from retail through technical support and returns management. This platform powers the solutions that we deploy at key end-user touch-points (retail, on-device, on-line and contact center) with the knowledge needed to dynamically manage how end-users buy, explore, use and maintain their wireless products and services.

It's this ability to help our wireless customers identify preventable issues, improve future products and services and build long-term, profitable relationships with end-users that means many of the world's most recognizable wireless brands now trust the outsourcing of their customer experience to WDS.